February was overall pretty good for my portfolio as I was hitting 52 week highs. However, the end of the month’s Snowflake report hurt. So I’m a few percent down from where I was. NVDA continues to perform well and is now my biggest position, due to its outperformance in my portfolio, not me adding to it.
I’m thinking about allocation changes because there have been many opportunities lately with a stock selling off hard then recovering. This market is really good at over-reacting in both directions and I’d like to take advantage of some of those. I have observed this many times over the past year with companies I’m in or companies I follow closely. I was hesitant when CFLT sold off hard a few months ago but held despite the “sky is falling” narrative. In hindsight, that was a huge buying opportunity. The reason this is driving my re-allocation process is that I’m not quite comfortable adding to those positions if they’re close to or above 20% of my portfolio.
I’m not sure if this isn’t in Saul’s knowledge base? I find that the biggest benefit to holding a small number of companies (5 now for me) is that this allows me to focus, knowing each company so well affords me the conviction to go against market over re-actions.
I’ve stated before that I’m not likely to do so unless the over re-action is, in the short term, at least 20%. This has worked extremely well for me over the years. I think it makes up, somewhat, for the fact that I’m terrible at adding on the way up, as Saul does.
